Indians have reasserted their love for Swiss banks. Despite NDA government’s tall claims of taking decisive action against parallel economy, the money parked by Indians in Swiss banks rose by over 50% to Rs 7,000 crore in 2017.
This reverses a three-year downward trend which the Centre has been presenting as a result of its vigorous clampdown on suspected black money stashed abroad.
The Indian case stands out. As against the 50 per cent rise in funds from India, the total funds held by all foreign clients of Swiss banks rose by just 3 per cent to Rs 100 lakh crore in 2017.
Interestingly, while the money stashed by Indians in Swiss banks rose, its neighbour Pakistan’s fell by over 21 per cent to a record low of Rs 7,700 crore. However, Pakistani nationals still have more money stashed in Swiss bank than Indians.
This could well be a setback for BJP government’s attempt to keep black money under check.
Swiss banks are most preferred by Indians. This was revealed by the official annual data released on June 28 by Swiss National Bank (SNB) – the central banking authority of Switzerland.
A retired senior finance ministry official, who was a part the note ban exercise and signing of treaties for flow of information to India from tax havens said, “I am surprised. This can happen only if the number of people who have honest money have started depositing overseas using the liberalised rules by RBI, or this can be a case of misuse by people who are desperate.”
A finance ministry official said, “I-T department has information about this. Its teams are scrutinising the data which is flowing over a period. Right now, the ministry can’t say how much of this is black money or how much of it is accounted for.”
In 2016, deposits by Indians had fallen by 25 per cent. The drop was marking the biggest ever annual plunge to approximately Rs 4,500 crore.
The SNB data shows that funds held directly by Indians in 2017 rose to Rs 6,891 crore. Of this, Rs 3200 crore was in the form of customer deposits, Rs 1050 crore through other banks and Rs 2640 crore A’s “other liabilities including securities. Nearly Rs 112 crore was held through fiduciaries or fund managers.
What’s alarming officials is the fact that the funds under all categories barring fiduciaries has gone up exponentially reversing trends for the last three years.
No official agreed to comment on the SNB data or queries raised by the Opposition.
If deposits in Swiss banks have witnessed a huge rise then what about the tax havens where information is difficult to access due to client protection rules?
The latest data from Zurich-based SNB came a few months after the new framework was put in place to deliver automatic exchange of information between Switzerland and India to check black money.
Switzerland has shed its past reluctance of sharing client details on evidence of misappropriation or illegality provided by the Indian government.
News credit : Indiatoday